The U.S. Attorney’s office disclosed Thursday that five top officers of the coop board of directors have been indicted for embezzling hundreds of thousands of dollars from members and rate payers

The U.S. Attorney’s office disclosed Thursday that five top officers of the coop board of directors have been indicted for embezzling hundreds of thousands of dollars from members and rate payers (BrianAJackson / Getty Images)

The managers of a small, eastern Connecticut electric utility cooperative say one of their core values is to “Learn from mistakes.” There could be a lot of learning opportunity in coming months at the Connecticut Municipal Electric Energy Cooperative.

The U.S. Attorney’s office disclosed Thursday that five top officers of the coop board of directors have been indicted for embezzling hundreds of thousands of dollars from members and rate payers and spending the money on posh Kentucky Derby junkets and lavish golf outings for themselves, their families and their friends.

The total for the travel and entertainment approaches $1 million, according to related indictments unsealed Thursday in U.S. District Court in New Haven.

The Norwich-based coop was organized 40 years ago to improve operational efficiencies and cut cost for members – all of which are small, municipally owned electric utilities in Bozrah, Groton, Norwich, Norwalk and the Jewett City borough of Griswold.

The indictments suggest the board members also have been devoting considerable effort to planning – and concealing – “strategic retreats” for “strategic guests/ partners.”

Those indicted are Drew Rankin, 61,of Columbia, the coop CEO; James Sullivan, 52, of Norwich, chairman of the board of directors; John Bilda, 54, of the City of Norwich representative to the board; Edward DeMuzzio, 77, the City of Groton representative to the board; and Edward Pryor, 62, of Groton, the coop CFO. Bilda and Sullivan have resigned from the coop.

The indictments describe arrangement to pay for Derby tickets, rooms, meals, gift bags and private air charter flights for 30 strategic guests/partners” in 2015 and the same accommodation for 40 guests and partners for the 2016 Derby, according to the indictments.

There were two golf junkets to an unidentified “luxury golf resort in West Virginia,” according to the indictments.

Rankin invited Sullivan, Bilda and DeMuzzio on the first trip so they could “evaluate the location” as the possible site or a larger gathering later in the year that would “enable full focus on strategic issues, celebratory review of results, and general social/ team building.”

Asked if he were available to help scout the location, Bilda replied by email: “Everything else can be adjusted for something as important as this.” Sullivan, who as board chairman set Rankin’s salary, wrote, “Is your name, ‘I deserve a raise?’”

The scouting trip was a success, according to the indictment, because a month later the coop paid $3,500 to buy custom golf balls from a company Bilda’s wife owned. The balls were printed with pictures of the faces of some of the strategic guests who were invited to the larger, $112,000 golf outing in October 2015.

All five men are charged are accused of conspiring to steal money in connection with the golf and Derby trips. The coop spent more than $800,000 on travel expenses, private chartered airfare, first-class hotel accommodations, meals, tickets to sporting events, golf fees, souvenirs and gifts, according to materials made public in court. The junkets were billed to a surplus account created to distribute money among member towns when electricity generation revenue exceeded operating costs.

They each are charged with one count of conspiracy, which carries a maximum five year sentence, and three counts of theft from programs receiving federal funds, with a maximum sentence of 10 years.

Rankin and Sullivan are charged separately in the second indictment with conspiring to use a coop lobbying account to pay for about $100,000 of Sullivan’s personal expenses, much of consisting of it extensive personal travel to Washington, D.C., visit his wife, California Congresswoman Linda Sanchez, a Democratic member of the U.S. House of Representatives.

Sullivan met Sanchez a decade ago when he was paid by the Metropolitan District Commission to lobby Congress for, for among other things, money for a massive sewer and water infrastructure upgrade in the metropolitan Hartford area.

Sullivan is said by associates to have persuaded U.S. Rep. John Larson, (D- 1st Dist.) to make federal economic stimulus money available for sewer and water projects, a category of work that had been excluded from the stimulus program. Larson introduced Sullivan to Sanchez and the two were later married in Larson’s office. Sullivan’s lobbying effort is said to have collected about $90 million for the MDC.

Sanchez had been jockeying this week for a leadership position in Congress after Democrats recaptured the House in the midterm elections Tuesday. But she notified Congressional colleagues by letter Thursday that she as withdrawing as a candidate for Chair of the Democratic Caucus because of “an unexpected family matter.”

Sullivan and Rankin are charged in the second indictment with conspiracy and three counts of theft concerning a program receiving federal funds, which carry, respectively five and ten year maximum sentences.